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Interest-rate swaps drop on speculation of money supply

Updated: 2012-10-23 11:06
( China Daily)

China's one-year interest-rate swaps declined on speculation that the central bank will pump money into the financial system to support a recovery in the world's second-largest economy.

Yuan positions at Chinese banks accumulated from sales of foreign exchange to the People's Bank of China rose 130.7 billion yuan ($20.9 billion) to 25.77 trillion yuan in September, after two months of declines, official data show. That reflects fund additions via currency-market intervention by the PBOC, according to Credit Agricole CIB.

The monetary authority gauged demand for sales of seven-, 14- and 28-day reverse repurchase contracts this week, according to a trader at a primary dealer required to bid at the auctions.

China Daily - Agencies